Facts
- In 1935, Najeeb and Mentaha Maloof conveyed approximately 71 acres in San Miguel County, New Mexico, to the City of Las Vegas by warranty deed.
- The deed stated that no building on the land could “at any time be used for immoral purposes, or for the manufacture and/or sale of any intoxicating liquors” by the grantee or its successors.
- The deed further provided that if the condition was broken, the deed would become “null, void, and of no effect,” and all right, title, and interest in the land would revert to the grantor and the grantor’s successors and assigns.
- Over time, portions of the original tract were divided for residential development, including housing developments and a mobile home park.
- Mia S. Prieskorn acquired two parcels totaling about 26.46 acres that lay within the original 71‑acre tract and were therefore subject to the recorded restriction and reversionary clause.
- There was no showing that Prieskorn (or prior owners) had violated the restriction, and there had been no attempt to enforce the reversionary clause based on an alleged breach.
- Prieskorn sought to sell the property and claimed the existence of the recorded reversionary clause impaired marketability and reduced value because buyers feared forfeiture if the condition were later deemed violated.
- Prieskorn filed a quiet-title action against Maloof successors and other potential claimants, asking the court to declare the reversionary clause invalid as an unreasonable restraint on alienation or, alternatively, unenforceable due to changed conditions.
- The district court refused to quiet title in Prieskorn free of the clause, concluding the clause restricted use rather than transfer and that changes around the property were not so substantial as to defeat the clause’s purpose or make enforcement unfair.
- Prieskorn appealed.
Issues
- Whether the deed’s reversionary clause was an unreasonable restraint on alienation and therefore invalid.
- Whether conditions in and around the property had changed so substantially that enforcing the reversionary clause would be inequitable or the clause’s purpose had been defeated.
Decision
- The Court of Appeals affirmed the district court’s judgment denying Prieskorn’s request to quiet title free of the reversionary clause.
- The court held the clause functioned as a restriction on how the land may be used (backed by a reversionary consequence upon breach), not a restraint that bars or disables transfer of the property.
- The court rejected Prieskorn’s claim that reduced marketability alone made the clause an unreasonable restraint on alienation where alienation itself was not prohibited.
- The court held the evidence supported the district court’s finding that changes in the surrounding area were not so material and profound that the clause’s purpose was defeated or that enforcement would be unfair.
- As a result, the Maloof successors’ contingent future interest tied to breach of the condition remained in place, and Prieskorn did not receive title free and clear of the recorded clause.
Legal Principles
- A deed provision that limits specified uses of land and provides for reversion if the condition is broken is generally treated as a use restriction secured by a future interest, not as a direct restraint on alienation.
- A restraint on alienation targets the ability to transfer title; a restriction that allows transfer but limits certain uses is evaluated differently and is less likely to be void on public-policy grounds.
- Claims that a future interest or reversionary clause makes property harder to sell, without more, do not establish invalidity when the clause does not prohibit conveyance and no breach is shown.
- A “changed conditions” theory requires proof that surrounding circumstances have shifted so significantly that the restriction’s original purpose can no longer be achieved or that enforcement would be unfair; ordinary development and passage of time do not, by themselves, satisfy that standard.
- Appellate courts generally defer to supported trial-court findings on whether the factual record shows sufficiently material change to justify equitable relief.
Conclusion
In Prieskorn v. Maloof, the New Mexico Court of Appeals affirmed denial of quiet-title relief, holding that the 1935 deed’s “immoral purposes/liquor” condition with reversionary language operated as a restriction on use rather than an invalid restraint on transfer, and that the record did not show changes so substantial that removing the clause was warranted on fairness grounds.